Editor’s Note: A letter from the US Chamber of Commerce to the House Financial Services Committee discussing the Volker rule is attached here. A portion of the letter (notes omitted) is reprinted below.
From: US Chamber of Commerce
The Chamber and its members were surprised when the Agencies provided no meaningful assessment of the quantifiable costs and benefits associated with their Volcker Rule Proposal when it was published for comment. Instead, the Agencies concluded that the Volcker Rule Proposal “would not appear to have a significant economic impact on small entities” such that no economic analysis was required under the Regulatory Flexibility Act (“RFA”) or the Small Business Regulatory Enforcement Fairness Act (“SBREFA”). This is remarkable in light of the impact that the Final Volcker Rule is having on many small financial institutions with an interest in CDOs.
Even more remarkable was the OCC’s assertion in the Volcker Rule Proposal that it had “completed an assessment” and “determined that this proposed rule [would] not result in expenditures by state, local, and tribal governments, or by the private sector, of $100 million or more in any one year.” Based on this fundamentally-flawed assessment, the OCC did not undertake the economic analysis normally associated with its economically significant rulemakings. Instead of providing a thorough economic analysis of their own in the Volcker Rule Proposal, the Agencies simply devoted a few dozen of the over 1,000 questions included in the proposed rule to open-ended inquiries about the costs and benefits of various aspects of the rule. At no time did OIRA, OMB, or the Office of Advocacy at the Small Business Administration ever question the blanket assertions by the Agencies that they did not have to make meaningful economic analysis of the Volcker Rule Proposal available for public comment, much less show that the economic benefits of the proposed rule outweighed the costs.
Read Complete Chamber letter here